Tata Power Company Limited“The signing of the financing agreements for Mundra UMPP is an important milestone. The good response demonstrates the faith of the lenders in our execution capabilities and expertise to complete the project in time. The terms of debt financing provides us long tenure of loans supporting our competitive bid price assumptions.” – Mr. Prasad R. Menon, Managing Director, Tata Power On April 24, 2008 The Tata Power Company Limited (TPCL), India’s largest private power company, signed a financial agreements with a consortium of banks for 4000 MW Ultra Mega Power Project (UMPP), coming up at Mundra, Gujarat under the Special Purpose Vehicle (SPV) Coastal Gujarat Power Limited (CGPL). The cost of the project is estimated at INR 170,000 million (USD 4.2 billion) with the first of the five units to be commissioned in September 2011. The entire plant is expected to be commissioned by end of 2012. The company decided to finance the project with a debt-equity ratio of 70:30 comprising of equity of Rs.42,500 million External Commercial Borrowings (ECB) of up to USD 1.8 billion and Rupee Loans of up to Rs.55,500 million. The banks that financed ECB’s include The Export-Import Bank of Korea, International Finance Corporation, Korea Export Insurance Corporation, Asian Development Bank, and BNP Paribas. While the domestic banks that financed rupee loan includes State Bank of India (SBI) (Lead bank for rupee lenders), India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore and State Bank of Indore. SBI Capital is the financial Advisor and Mandated Lead Arranger for Rupee loans. This is the first Ultra Mega Power Project in India built on super critical technology to improve efficiency and to decrease green house gases. The Government of India in its ambitious project of adding 73 GW of power during the 11th five year plan decided to set up nine UMPP in India which will allocated to players in tariff led competitive bidding. Against this background, the scenario of power industry follows:

Power IndustryThe power industry is considered as one of the important industries for the progress of any country. It is considered as the backbone of any country’s development. The Indian government has laid much emphasis on the development of power sector since independence; accordingly, the installed capacity has increased from 1713MW in 1950 to 143061.01 MW as on 31st March 2008, registering an 83-fold increase in power generation capacity. The total installed capacity as on 30th April 2008 was at 143311.01 MW. The electricity generation in India has increased from 5.4 billion units in 1950 to 624 billion units in 2006-07 registering a 115-fold increase in generation. Currently, India stands fifth in terms of installed capacity. With the growing generation capacity the capacity of transmission and distribution is also increasing. The present transmission and distribution capacity of India is at 5.2 million circuit Km, which is third largest in the world. Despite heavy investments in generation and transmission and distribution, the per capita consumption of electricity in India is far less than world average. The per capita consumption of electricity in India during 2007-08 was at 704.2 kwh per year against the world average of 2596 kwh. Electricity falls with in the jurisdiction of Central government and the State governments. In many states the electricity boards are vertically integrated entities, majority of which are now been unbundled into Generation, Transmission and Distribution companies, which are state owned. However to meet the targeted 1000 kwh per capita availability of power by 2012, the government has been encouraging private players in power generation. States like Delhi, Orissa went one step a

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